On February 25, Hamilton Lane co-CEO Erik Hirsch joined ‘Closing Bell Overtime’ on CNBC to discuss the developments that currently hinder the IPO pipeline. Erik Hirsch noted that there are two competing factors at play. On one side, there is general market uncertainty, which is currently the dominant issue. While on the other side, there are positive factors: many high-quality businesses in private markets are ready for an exit. They are mature, cash flow positive, and growing. The IPO market is the logical conclusion for them, and the public markets need more new names to reduce concentration in a few technology businesses. For the public markets to be healthy, they need fresh blood.
Hirsch believes the IPO market can have a good year without relying solely on software. There is room for more software companies, but there is also interest in traditional non-tech businesses to balance market weightings. He identified sectors that could see growth, such as manufacturing, which could benefit from reshoring and reinvestment in the US. The food supply chain and healthcare are also expected to benefit from administrative changes. Regarding President Trump’s positioning on tariffs, Hirsch thinks it is more about negotiating tactics than actual tariffs. If negotiations cease and tariffs become the focus, there will likely be a market reaction. The uncertainty extends to government job cuts, with questions about the scale of reductions and where displaced workers will go. Despite some positive signs for certain sectors and businesses ready for IPOs, market uncertainty, and regulatory changes are holding back the IPO market and dealmaking. The environment of unpredictability makes it challenging for companies to pursue IPOs or M&A deals at present.
Still, the IPO market holds promise due to a strong backlog of mature and high-quality private businesses eager for public exits. That being said, we’re here with a list of the 12 best IPO stocks to buy in 2025.
Our Methodology
We used the Finviz stock screener to compile a list of the top companies that went public in the last 2 years. We then selected 12 stocks with high analysts’ upside potential that were also the most popular among elite hedge funds. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12 Best IPO Stocks to Buy in 2025
12. CG Oncology Inc. (NASDAQ:CGON)
Average Upside Potential as of March 21: 154.05%
Number of Hedge Fund Holders: 27
CG Oncology Inc. (NASDAQ:CGON) is a clinical-stage biopharmaceutical company that is dedicated to bladder cancer treatment. It develops bladder-sparing therapies, with a focus on its lead candidate which is called cretostimogene, and other innovative treatments for various stages of the disease.
Cretostimogene’s Phase 3 BOND-003 trial, which targets patients who are unresponsive to standard treatment (BCG), shows promising results. A significant 74.5% of patients achieved a complete response. The median duration of this response surpassed 27 months in Q3 2024 and is still ongoing. At 12 months, 63.5% of patients still showed a response, and at 24 months, 56.6% did. 97.3% of patients were free from progression to muscle-invasive bladder cancer at 12 months. The drug exhibits a strong safety profile, with no severe adverse events or treatment discontinuations reported.
The company is financially stable with $540.7 million in cash reserves, which is projected to be enough for funding through 2027. It invested $19.6 million in R&D in Q3. Analysts predict a 70% annual revenue growth over the next three years. CG Oncology Inc. (NASDAQ:CGON) is actively pursuing FDA approval for cretostimogene, which has already received Fast Track and Breakthrough Therapy Designations. These are FDA programs that are designed to expedite the development and review of drugs.
11. Klaviyo Inc. (NYSE:KVYO)
Average Upside Potential as of March 21: 58.01%
Number of Hedge Fund Holders: 30
Klaviyo Inc. (NYSE:KVYO) is a technology company that offers a cloud-native SaaS platform. This platform provides businesses of all sizes with personalized marketing tools, which include email, SMS, and push notifications. It uses data management and AI to enhance customer engagement.
The company’s marketing automation platform empowers 167,000+ brands to build personalized customer relationships. This platform is a central data hub that enables businesses to understand and engage with their customers across multiple channels. In 2024, the company’s annual revenue reached $937 million, which marked a 34% year-over-year increase. Q4 2024 alone saw $270 million in revenue, which was also up 34%.
The dollar-based net revenue retention rate at Klaviyo Inc. (NYSE:KVYO) was 108% in Q4. The company added 10,000+ new customers in this quarter, which brought their total customer count to 167,000. This marked a 17% year-over-year increase. The company is also expanding internationally, with EMEA revenue growth accelerating to 49% in Q4. It’s attracting larger clients and has formed a new partnership with WooCommerce to be the preferred marketing automation partner.
